IP Law Daily Smart TV makers Sharp and Vizio escape Wi-LAN’s infringement suit
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Tuesday, April 6, 2021

Smart TV makers Sharp and Vizio escape Wi-LAN’s infringement suit

By Cheryl Beise, J.D.

District court’s evidentiary and claim construction rulings upheld.

The federal district court in Wilmington, Delaware, did not err in finding that "smart" televisions manufactured by Sharp and Vizio as a matter of law did not infringe two patents owned by Wi-LAN Inc., the U.S. Court of Appeals for the Federal Circuit has ruled. With regard to one patent, the district court correctly construed two disputed claim limitations. With respect to the second patent, the district court did not abuse its discretion in holding that a source code printout Wi-LAN obtained from third-party chip manufacturers was inadmissible (Wi-LAN Inc. v. Sharp Electronics Corp., April 6, 2021, Dyk, T.).

Wi-LAN owns U.S. Patent Nos. 6,359,654 (the ’654 patent) and 6,490,250 (the ’250 patent). The ’654 patent claims "methods and systems for displaying interlaced video on monitors [that] are non-interlaced." For decades, interlacing video was used in television sets to prevent a "flicker" effect, an effect that results from the difference in the frame rate of the television set and the frame rate in which a program was filmed. Modern television sets use noninterlaced video, which, unlike interlaced video, displays an entire frame every 1/60th of a second and allows for increased detail to be displayed on a screen. The’250 patent "relates generally to multimedia encoders and specifically [to] an integrated multimedia stream multiplexer." A stream multiplexer receives separate audio and video data streams and combines them into a single multimedia data stream. The claimed system dynamically adjusts the bit rates of the input streams to obtain a combined multimedia data stream with an optimal bit rate.

In 2015, Wi-LAN brought suit in the federal district court in Delaware for patent infringement against Sharp Electronics, accusing its "smart" television sets of direct and induced infringement of claims 1, 4, and 9 of the ’654 patent and claims 1, 4, and 6 of the ’250 patent. Wi-LAN filed a similar complaint against Vizio, asserting the same claims of the ’654 and ’250 patents. The district court did not consolidate the Vizio and Sharp cases but managed the cases in parallel. In February 2018, the district court issued its claim construction order. Wi-LAN conceded that that it could not prove infringement of the asserted claims of the ’250 patent under the district court’s claim construction. The district court entered a stipulated judgment of noninfringement of the ’250 patent. With respect to the ’654 patent, the district court found that the printout of the source code that Wi-LAN obtained from third-party chip manufacturers and sought to use as evidence was inadmissible. In September 2020, the district court granted summary judgment of noninfringement to Sharp and Vizio. Wi-LAN appealed in both cases.

The ’654 patent—source code printout admissibility. With respect to the ’654 patent, Wi-LAN argued the district court abused its discretion in holding that the source code printout Wi-LAN obtained from third-party chip manufacturers and sought to use as evidence was inadmissible. Wi-LAN sued the chip manufactures and dismissed the lawsuits after obtaining the source code and declarations from the chip manufacturer employees.

Wi-LAN first contended that the source code printout constituted a business record admissible under Federal Rule of Evidence 803(6). Wi-LAN asserted that it properly authenticated the source code printout through the declarations of the chip manufacturers’ employees. The Federal Circuit, however, agreed with the district court that the employee declarations could not be used to authenticate the source code printout. The court noted that declarations could not be used at summary judgment as a proxy for trial testimony unless the witness will be available to testify at trial. In this case, Wi-LAN did not establish that the declarants would be available to testify at trial.

Wi-LAN also appeared to argue that the source code printouts were properly authenticated because the declarations were custodial declarations that were themselves admissible as business records under Rule 803(6). However, the Federal Circuit pointed out that the declarations were created and prepared for the purposes of litigation, placing them outside the scope of the exception.

Wi-LAN argued alternatively that, under Third Circuit law, the deficiencies in the declarations did not preclude their use. Even accepting this approach—which seemed to run counter to the text of Rule 803(6), the Federal Circuit said—the declarations did not suffice because Wi-LAN failed to meet Rule 803(6)’s requirement that "the opponent does not show that the source of information or the method or circumstance of preparation indicate a lack of trustworthiness." Fed. R. Evid. 803(6)(E). Consequently, the district court did not abuse its discretion in holding that the source code printout did not constitute a business record admissible under Rule 803(6).

Nor did the district court abuse its discretion by finding that the source code printout was inadmissible under Federal Rule of Evidence 901(b)(4), which permits a record to be admitted into evidence if "[t]he appearance, contents, substance, internal patterns, or other distinctive characteristics of the item, taken together with all the circumstances," "support a finding that the item is what the proponent claims it is." The district court found that the source code printout did not satisfy Rule 901(b)(4)’s strictures "given the highly dubious circumstances surrounding the production and the lack of indicia of trustworthiness in the source code."

Wi-LAN alternatively argued that the source code printout should have been admitted into evidence under Federal Rule of Evidence 703. The Federal Circuit disagreed. Rule 703 does not make admissible otherwise inadmissible evidence, the court noted. Other circuit courts have recognized that expert opinion under Rule 703 may not be used a backdoor means of circumventing hearsay rules. While Rule 703 permits the proponent of an expert’s opinion to disclose the underlying material to a jury if "experts in the particular field would reasonably rely on" the underlying material, Wi-LAN in this case did not establish that experts in the field "reasonably rely on" unauthenticated source code. The court did not credit Wi-LAN’s unsupported and conclusory statement that "the declarations and source code evidence are the type of information that an expert ‘would reasonably rely on in forming an opinion’ under FRE 703."

Lastly, Wi-LAN argued that the district court should have granted it additional time to obtain an admissible version of the source code. The Federal Circuit again disagreed. Wi-LAN had been on notice since early 2016 that it was going to need the system-on-chip source code from third parties to prove its direct infringement case. But despite repeated extensions, Wi-LAN only procured a single printout version of the source code with declarations after suing the third-party manufacturers. On this record, the district court did not abuse its discretion in denying Wi-LAN an additional opportunity to obtain an admissible form of the source code.

The ’654 patent—claim construction. With respect to the ’250 patent, Wi-LAN challenged the district court’s construction of two claim limitations: (1) "output multimedia data stream" and (2) "a multimedia processor, coupled to the data rate analyzer." Both limitations appeared in each of the asserted claims—independent claim 1 and dependent claims 4 and 6.

The district court construed "output multimedia data stream" to mean a "combined audio and video stream that are output from the system." Wi-LAN contended that the construction was unduly narrow because "output from the system" was not supported. The Federal Circuit was not persuaded. The ’250 patent’s specification explained that the "claimed input multimedia data streams" were combined into a single output data stream within the claimed "integrated multimedia encoding system" and that that system transmitted the data stream to other components of the larger computer system. The ’250 patent’s description of Figures 1, 2, and 7 added further support for the district court’s construction, the court noted. In each of these examples, the output multimedia data stream was being output from the integrated multimedia encoding system.

The district court construed "a multimedia processor, coupled to the data rate analyzer" to mean "a multimedia processor connected to the data rate analyzer, where the multimedia processor is separate from, and not a sub- component of, the data rate analyzer." According to the Federal Circuit, this construction was correct. It was properly based on the patent’s consistent use of "coupled" "to refer to components that are not subcomponents of each other" and "in" "to refer to components that could be sub-components of each other," the court observed.

This case is No. 20-1041.

Attorneys: Daniel Fletcher Olejko (Bragalone Olejko Saad PC) for Wi-LAN Inc. Gianni Cutri (Kirkland & Ellis LLP) for Sharp Electronics Corp. Mark S. Davies (Orrick, Herrington & Sutcliffe LLP) for Vizio, Inc.

Companies: Wi-LAN Inc.; Sharp Electronics Corp.; Vizio, Inc.

MainStory: TopStory Patent FedCirNews GCNNews

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